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Blake Gopnik has an excellent piece on the art bubble in the latest Newsweek (where he was sadly laid off last week), which has been met by a predictable rubbishing from Marion Maneker. Both men agree on the symptoms: prices unrelated to quality, and artists who can go from hot to not in a very short amount of time. But they disagree on what those symptoms mean: Gopnik thinks that they mean “today’s contemporary market is due to deflate”, while Maneker sees art-market ups and downs as just part of what happens in any healthily-functioning market, and nothing to get particularly excited about.

The point that I think Maneker misses — and that he consistently misses in his attacks on people who are “complaining about the art market” — is that this particular market is qualitatively different from what you would consider a healthy market to be, not least because the prices are quantitatively completely bonkers. That was the main thrust of my Occupy Art post, and of the pieces by Dave Hickey and Sarah Thornton and Jerry Saltz and Charlie Finch that I linked to: markets, in general, are good and useful things. But sometimes they go crazy, and this is one of those times, and that’s a bad thing, not a good thing.

Collectively, we have managed to spark at least the hint of a debate — or, as Patricia Cohen describes it while quoting a slew of dealers and collectors at Art Basel Miami Beach, a “backlash against the backlash”. (One hint to people talking to the New York Times: saying things like “I’m grateful to Bugatti” is not likely to attract readers to your cause.) Debate is good! But I do still feel that everybody’s talking past each other. For instance: if the critics complain about the prices that some contemporary art is selling for, responding by saying “but other art is cheap”, as gazillionaires Don Rubell and Marc Glimcher do in Cohen’s article, does seem to miss the point.

Similarly, saying “look, some art is going down in value”, as Maneker gleefully did in November, also misses the point. Yes, Damien Hirsts are worth less today than they were in 2008. That was entirely predictable (I called the top of the Hirst market exactly when it happened), and it’s entirely in line with the way in which Hirst has graduated himself out of the art market and into the luxury-goods market. As I said in March, Hirsts have not been a speculative investment since 2008, and the fact that Hirsts are dropping in value does not, to use Maneker’s word, “confound” those of us who have a beef with the upper levels of the contemporary-art market.

Rather, what is uniquely troubling about today’s contemporary art market are two things: absolute values and relative values. Gopnik runs down a list which could have dozens of different names:

A Richard Prince “nurse,” hung amid Picassos and Miros, selling for $6.5 million; a Damien Hirst “medicine cabinet” priced at $4 million; Julie Mehretu squiggles, barely a decade old, for $2.6 million—all for sale at Art Basel, and all with prices so high they are bound to crash-land…

An unproven artist such as Wade Guyton, now showing at the Whitney Museum in New York, can fetch more than a legend of pop art like Richard Artschwager, on view downstairs from Guyton’s work.

These numbers are scarily high in absolute terms, and relative to anything you might want to name: Old Masters, vintage cars, four-bedroom houses. And there’s real delusion behind them. In a passage which didn’t make it into the final version of Gopnik’s article, he writes:

The market for art is unlike any other, because it’s built on some notion of true, underlying value ­­- on the idea that you buy art not because of its price (because of how much others might want to pay for it) but because of some real cultural worth that it represents. “We would not be mistaken for taking Richter’s abstractions as retroactively analogous with Mark Rothko, Barnett Newman, or Yves Klein,” says the auction text for a glitzy, record-setting abstraction by Gerhard Richter ­- a genius figurative painter whose abstract work could be mistaken for mall-gallery schlock. The auction copy for Koons’s $34 million “Tulips” compares the sculpture to a Brancusi and says that Koons has “tapped into the canon of the history of art by taking flowers as his subject for this still life colossus, introducing ideas of the memento mori as well as romance and beauty.” Yet if these judgments about cultural worth turn out to be wrong, then so is any big price they bolster.

The real forces driving the seven- and eight-figure prices in the contemporary market are not art-historical importance, so much as what Gopnik characterizes as the souk-like atmosphere surrounding both fairs and auction houses — the places where most big-ticket contemporary art is now sold, and places where the act of spending money is more important than the art it’s being spent on. Maneker is absolutely right about this: “Of course it’s not about the art,” he writes. “An auction is an event about the buyers, not the art.” And exactly the same thing can be said about an event like Art Basel Miami Beach — an event where Kelly Crow’s curtain-raiser can include this photo caption:

New York artist Wade Guyton earned a reputation for using a large inkjet printer to create images of the letter ‘U.’

Those “U” panels now sell for upwards of $200,000 apiece, brand new, and one early X painting recently sold for $782,500.

Without art-historical importance, there’s no way that these artworks are going to hold their value for more than a few years. And even with art-historical importance, there’s no reason why they should cost orders of magnitude more than art which genuinely has stood the test of time. As Sean Kelly tells Gopnik, you can buy 10 or 20 Marcel Duchamps for the price of one Jeff Koons, which just doesn’t make any sense at all.

To quote Herb Stein, if something can’t go on forever, it won’t. And as Gopnik says, “someone, someday, will be left holding the bag”. Narrowly, that group of people will be the collectors who are currently spending obscene sums on churned-out artwork: it just doesn’t make sense to drop millions of dollars on a Christopher Wool, say, when no one has a clue how many thousands of the things there are in existence. More broadly, however, the bursting of the bubble is likely to mean a very nasty recession across the whole of the art world, causing serious damage to a slew of curators, gallerists, artists, museum professionals, and other non-rich people. Spectacular busts are born of overconfidence, of the idea that this time is different. And the signs of overconfidence are hard to miss:

Every time you thought the world was ending,” Kelly says, “this market has confounded that prediction.” After 9/11, he asked himself, “Who’s ever going to buy art again?” only to discover that his clients were more eager than ever to nest at home with precious things.

A crash of the market’s biggest players might still bring everyone down, but Kelly feels that today’s art world has probably—probably—become such a broad river, as he puts it, that a whirlpool in one place might not disturb currents elsewhere. (Every gallerist I spoke to insisted that the market for their particular, singularly talented artists was bound to be stable, even if their colleagues were clearly at risk—precisely the kind of bulletproof thinking that’s typical of boom times.) This fall, Kelly almost quadrupled the size of his gallery; our interview ended so he could vet yet another applicant to his growing staff.

Sean Kelly has for decades been one of the most respected gallerists in New York, with a small space showing beautiful, austere work at high-but-not-bonkers prices. His shows are often curated better than those at major museums, and he has neatly sidestepped the trendy in favor of the timeless. Until now. Kelly clearly can’t sustain that modest practice any more: the art market has become a world of “go big or go home”, and Kelly now represents glitzy and trendy artists like Terence Koh and Kehinde Wiley. When even Sean Kelly can no longer resist the gravitational pull exerted by the weight of money chasing shiny objects, and instead sounds like Ben Bernanke circa March 2007, then that’s a sign that the whole art market has become hollow at the core, in a way it never used to be. Like all hollow things, bubbles included, it’s liable to implode at any time.